Peso climbs vs dollar as geopolitical tensions ease

THE PESO strengthened versus the greenback on Wednesday as some developments in the Ukrainian border brought relief to investors and amid gains in the local stock market.

The local unit closed at P51.285 per dollar on Wednesday, gaining 9.7 centavos from its P51.382 close on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened Wednesday’s session stronger at P51.319 against the dollar. Its weakest showing was at P51.34, while its intraday best was at P51.27 versus the greenback.

Dollars exchanged increased to $596.1 million on Wednesday from $560.28 million on Tuesday.

“The peso appreciated after Russia announced that it will be withdrawing some military troops situated near the Ukrainian border,” a trader said in an e-mail.

The Russian defense ministry on Tuesday showed footage showing it was returning some troops to base after exercises near the Ukrainian border, Reuters reported. However, US President Joseph R. Biden said they have not verified the move.

The peso strengthened amid the decline in oil prices following Russia’s pronouncement, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Oil prices dropped by 3% on Tuesday, although it already recouped some losses by Wednesday. Brent rose 62 cents or 0.7% to $93.90 a barrel by 0722 GMT, while the US West Texas Intermediate crude was up by 64 cents or 0.7% to $92.71.

Mr. Ricafort said there was also positive sentiment amid gains in the local stock market.

The benchmark Philippine Stock Exchange index closed at 7,452 on Wednesday, up by 142.88 points or 1.95% from its previous finish.

The wider all shares index also gained 1.82% or 70.34 points to end at 3,930.54.

For Thursday, Mr. Ricafort gave a forecast range of P51.20 to P51.35, while the trader expects the local unit to move within P51.20 to P51.45 a dollar. — L.W.T. Noble with Reuters